Roche
and Epigenomics announced today a broad three-year collaboration to develop a range of molecular diagnostic
and pharmacogenomic cancer products based on Epigenomics’ DNA-methylation technologies. DNA Methylation
is a natural “switch” that controls gene expression giving rise to distinct patterns in cells including
cancer and other diseased cells. Based on these methylation patterns, cancer can be detected and classified
from tissue and bodily fluids, such as blood serum or urine samples.

Under
the terms of the agreement, Roche will make an upfront payment of € 4 million and in addition provide
R&D funding, milestone payments and royalties on product sales. Both partners estimate that if all
products are successfully launched, the total value of the agreement could exceed € 100 million.

The
collaboration comprises the development of diagnostics products for use in early detection of cancers
from major sites (e.g. colon, breast, prostate), their characterization (e.g. aggressive versus non-aggressive
tumors) and prediction of treatment response to particular anti-cancer drugs. Epigenomics will be responsible
for marker discovery, identification and pre-validation. Epigenomics’ DNA methylation technologies will
be incorporated into Roche’s existing and future PCR platforms (PCR: polymerase chain reaction) and
into the recently licensed Microarray Technology. Diagnostic test development, clinical trials, product
manufacturing, regulatory submissions and all sales and marketing worldwide are to be conducted by Roche.

“We are very enthusiastic about this collaboration. Roche is already the world
leader in cancer therapies and with this alliance we will complement our position in the diagnostics
field. The products that are being developed as part of this collaboration address the urgent need for
earlier detection of cancer in bodily fluids by more accurate screening tests, as well as identifying
those patients who need chemotherapy and most likely respond to particular cancer therapies,” says Heino
von Prondzynski, Head of Roche Diagnostics and member of Roche’s Corporate Executive Committee. “As
the worldwide leader in in vitro Diagnostics we are committed to identify diseases
early in order to improve treatment and enhance patients’ quality of life. The alliance with Epigenomics
will help us to remain at the forefront of the molecular diagnostics market and support our activities
to pursue a market that could be greater than 3 billion Swiss francs ten years from now for our divisional
cancer care program.”

Alexander Olek, CEO of Epigenomics, adds: “This collaboration
validates Epigenomics' DNA methylation technology and product development approach. By underlining the
synergy between our in-house units, Diagnostics and Pharma Technology businesses, it allows us to pursue
our vision of personalizing medicine. With the emerging trend of the pharmaceutical industry moving
towards administering therapy only with a specific diagnostic test, we feel that the partnership with
Roche Diagnostics solidifies Epigenomics’ position as a leader in this field.”

DNA
Methylation and Diagnostic ApplicationsDNA methylation is a natural phenomenon
whereby a methyl chemical group is attached to the cytosine base of DNA. The pattern of DNA methylation
is one of the primary biological mechanisms that controls gene expression or activity. As the methyl
group is either present or not, the pattern on any strand of DNA can be digitized and easily interpreted.
Measuring the differences in DNA methylation patterns of diseased and healthy conditions provides a
reliable, sensitive and convenient way of identifying disease. For example, bodily fluid samples (e.g.
blood serum or urine) can be used to reveal whether that person has cancer. Using a tissue sample from
this individual, the DNA methylation patterns can be interpreted to show what type of cancer it is and
most importantly guide physicians on the most appropriate way to treating it.

Roche
is the world leader in oncology treatmentRoche Diagnostics offers a broad portfolio
of tumor markers for prostate, colorectal, liver, ovarian, breast, stomach, pancreas and lung cancer,
as well as a range of molecular oncology tests running on the LightCycler. Within its Integrated Cancer
Care Unit the company develops new tests which will have a significant impact on disease management
of cancer patients in the future. The franchise of its pharmaceuticals Division includes
MabThera (non-Hodgkin’s lymphoma), Xeloda (colorectal cancer, breast cancer), Herceptin (breast cancer),
NeoRecormon (anaemia in various cancer settings), Roferon-A (leukaemia, Kaposi’s sarcoma, malignant
melanoma, renal cell carcinoma) and Kytril (chemotherapy and radiotherapy-induced nausea). The franchise
accounted in 2002 for sales of more than 5 billion Swiss francs (+33%).

About
RocheHeadquartered in Basel, Switzerland, Roche is one of the world’s leading
research-oriented healthcare groups in the fields of pharmaceuticals and diagnostics. Roche’s products
and services address prevention, diagnosis and treatment of diseases, thus enhancing well-being and
quality of life. In 2002 Roche’s core businesses recorded sales of 26.5 billion Swiss francs and employed
some 61,900 people worldwide. Roche’s Diagnostics Division, the world leader in in vitro
diagnostics with a uniquely broad product portfolio, supplies a wide array of innovative testing products
and services to researchers, physicians, patients, hospitals and laboratories world-wide.

About
EpigenomicsEpigenomics is committed to significantly improving the treatment of
cancer and other complex diseases by developing novel diagnostic and pharmacogenomic products based
on DNA methylation. By detecting and interpreting DNA methylation patterns, the "on" and "off"
signs for genes, Epigenomics can create a digitized readout (Digital Phenotype®) for each cell. The
comparison of a patient’s cells against healthy and abnormal reference samples enables an exact diagnosis
of disease at a very early stage and provides physicians with essential information to help guide an
appropriate therapy. The combination of diagnosis and therapy, based on this information and robust
proprietary technology, is “personalizing” medicine. Epigenomics is supported by a network of renowned
academic researchers and clinicians, with expertise in the fields of cancer and DNA methylation. The
company has its headquarters in Berlin, Germany, and a wholly owned subsidiary in Seattle, USA. For
further information, please visit the website.

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